Former JBS exec Batista arrested for insider trading

Wesley Batista, former JBS S.A. chief executive officer, was arrested Wednesday morning for allegedly using insider trading to profit while negotiating a plea bargain deal with prosecutors in April and May, according to Brazil’s Federal Police, in connection with a meatpacker scandal in the country.

According to BBC.com, investigators allege that Wesley and his brother Joesley sold a large number of shares in their company in the weeks before they revealed information about how they bribed high-ranking officials, fully knowing that the revelations would cause their company’s shares to tumble.

Police say the brothers saved $44 million through the alleged insider trading and that they knew that the information they had could help move financial markets.

In addition to the Batistas, five other JBS executives entered a plea agreement in May with Brazil’s Federal Public Prosecutor’s Office, where Brazil’s President Michel Temer was implicated, accusing Temer of endorsing the bribing of a witness in the country’s largest meat scandal. The brothers’ testimony reportedly unleashed a political crisis, alleging that they bribed hundreds of politicians.

The Batista brothers’ legal issues stem from a scandal that rocked the Brazilian meat processing industry. Dozens of meat processors officers, including JBS S.A. and BRF S.A., were searched by Brazilian federal police in March. A two-year investigation into alleged bribery of regulators to subvert plant inspections lead to 194 raids by more than 1,100 officers, according to published reports.

The investigation, known as “Operation Weak Flesh,” had uncovered about 40 cases of meatpackers who had bribed inspectors and politicians to ignore unsanitary practices, police say. Regulators in the states of Paraná, Minas Gerais and Goiás helped producers place adulterated products in the marketplace by bribing state food safety auditors to issue fake sanitary permits and forgo normal oversight work.